by Mark Potts

About Me

I'm CEO of Newspeg.com, a social news-sharing platform. I've spent 20 years at the intersection of traditional and digital journalism. I've helped to invent ways to read and interact with the news and advertising on computer screens and iPads, and before that, I wrote news stories on typewriters and six-ply paper. I co-founded WashingtonPost.com and hyperlocal pioneers Backfence.com and GrowthSpur; served as editor of Philly.com; taught media entrepreneurship at the University of Maryland; and have done product-development and strategy consulting for all sorts of media and Internet companies. You can read more about me here.

January 2014

May 27, 2009

One of the best things that can happen to a newspaper is when its readers start feeling like they own it. They become so bound up in the paper that they take offense at any effort to change it or reduce it. That's real customer loyalty.

One of the worst things that often happens to a newspaper is when its employees—especially in the newsroom—start feeling like they own it. They act like the paper is some sort of democracy in which they have a significant say in every aspect, and that they can defy management because, well, it's "our paper." The suits in the front office can pound sand, in this view, when the newsroom knows best what it thinks is good for the paper and its business.

Unfortunately, that's the kind of foolishness that's manifesting itself at the Boston Globe, where the Boston Newspaper Guild membership votes June 8 on a package of pay cuts that the paper's true owner, The New York Times Co., says is required to keep the Globe alive. The Guild's leadership, while not taking a formal position on these cuts—a tough 8.4 percent salary reduction, plus five days of unpaid furlough (bringing the cut closer to an actual 10 percent) and various benefit reductions—agreed to put them to a membership vote after some very contentious negotiations with the Times Co. During those talks, the Times bluntly threatened to close the money-hemorrhaging paper if it couldn't get the concessions it wanted.

Not so fast, says the Guild's rank and file, or at least some members of it. They're circulating a petition urging management to limit the cuts to 5 percent, with the clear threat that the concession package will be rejected by a majority of the Guild's 600 members if the Times Co. doesn't see it exactly the way the newsroom does. (Other Globe unions, incidentally, have agreed to the requested cuts.) Feeling possessive about the Globe, the newsroom crowd seems to think it has a right to dictate business terms to the true owner of the paper.

Well, good luck with that. Look, nobody wants a pay cut. That's totally understandable. And the Times' position has been made difficult by revelations like the New Yorker's report this week that Times columnist Tom Friedman (three Pulitzers, but never mind) enjoys what amounts to an unlimited expense account. That's further inflamed the Boston Guild members, unsurprisingly.

But the renegade Boston newsies are playing with fire. By all indications the Times is very serious about the need to make major cuts at the Globe—or the paper will be closed. Indeed, the Times and the Globe's management have indicated they'll implement an across-the-board 23 percent pay cut if the agreed-upon deal is rejected by the Guild membership. And nobody's ruling out the possibility that the Times could decide to simply close the door and walk away, especially if it feels like it's dealing with an intractable workforce. In the worst advertising economy in memory, with ad revenue plummeting and the Globe losing more than $1 million a week, the Times' request for major cuts is understandable. (Indeed, it appears that the planned cuts still won't cover the paper's losses.)

The Boston union members certainly have the right to decide their own future through collective bargaining. But they also need to understand what that future might be. They need to appreciate the realities of the situation, one of which is that the Globe is in dire financial straits, and another is that they're not in ultimate control of the paper–its corporate owners are, like it or not. The Guild members get to vote on the concessions, but this ain't a democracy, no matter how much they resent the Times ownership or feel like the Globe is "their" paper.

This is a very dangerous game of chicken to be playing. By rejecting a 10 percent cut in hopes of getting an idealized 5 percent cut, the Globe's Guild members may be setting themselves up for a 23 percent pay cut—or a 100 percent job cut. That doesn't seem like a smart trade-off.

May 26, 2009

It's been eminently fashionable to bash Sam Zell for his gutting of Tribune Co., and with good reason—a copy of the Baltimore Sun I saw recently looked about as substantial as a cocktail napkin, and that was before the Sun's latest newsroom layoffs. The chain's other papers aren't much better, by all reports.

But Zell's minions have also been doing more innovation than a lot of their counterparts in the industry, fiddling with everything from radicalredesigns to ambitious hyperlocal networks. And now Tribune seems ready to unleash its most interesting experiment in reinvention yet: ChicagoNow.

It's a little hard to see exactly what ChicagoNow is up to—the beta site is still very much a work in progress, with a launch promised in a few weeks. But there are strong hints available if you click around the site, and a very promising—even thrilling—description of what's coming in a promotional video here. The ChicagoNow staff is blogging about its progress, too.

At its core, ChicagoNow appears to be an effort to create a new kind of local site by aggregating and curating local bloggers, staff material and other content, with a heavy sprinkling of social features, mobile options and other goodies. The video called it "HuffingtonPost meets Facebook for Chicago," which may be a bit strong, but it's a healthy ambition. This is the sort of source-neutral, smartly curated, aggregation-heavy, social-savvy, distribution-prolific local site that every news organization should be doing. It's what Web-centric companies like HuffingtonPost (which already has its own local Chicago blog/aggregation site) do naturally.

In other words, it's the obvious way to go, the kind of thing people like Jeff Jarvis and I have advocated for years—do what you do best and link to the rest, as Jeff aptly puts it. Phil Anschutz's Examiner.com is quietly building cookie-cutter curated, aggregated sites around the country, and the NBC-owned TV stations are doing the same. But as far as I know, Tribune is the first major newspaper company to take this overdue leap into the future in a major way in its home market—the market it knows best and in which it can bring its expertise and power to bear for readers (and advertisers). Kudos to them.

It remains to be seen how ChicagoNow will grow from its sketchy beta—the initial hints of content are good, but it needs an interface, and a good one is shown in a teaser graphic on the home page, reproduced here—but the Zellots are taking a huge step in the right direction. Finally, at long last, something very different than just pasting the newspaper on a screen. (It sure beats weird, timid, token efforts like the NY Times' new "social media editor." Wow. Bold.)

ChicagoNow is probably too late to the game to really help Tribune, alas, given the crappy economics of the newspaper business these days. But at least one of the big publishers is trying something radical, visionary and out of the box. It's about damn time. Everybody else in the industry should be following the development of ChicagoNow closely—and scrambling like crazy to get their own curated, aggregated, social sites ready for their markets.

May 20, 2009

Essential reading: Robert Niles on OJR, channeling search-engine optimization expert Danny Sullivan, lists 10 things news sites should do to improve their standings in search results. It's aimed at start-ups, but it's good advice for any site.

I've written about this before—it's just mind-boggling that most news sites seem to be oblivious to the importance of SEO. Every newspaper site should have an SEO expert on staff, constantly looking for ways to improve rankings and traffic. This handy guide is (almost) the next best thing.

May 18, 2009

They want to know how Hussman is managing to charge subscription fees for access to the Democrat-Gazette Web site, which he owns and publishes. In the midst of ever-more-heateddebate over the notion of forcing readers to pay for access to online newspapers, Hussman seems to be making such a strategy work in Little Rock.

Well, after a fashion. He's certainly not doing it for the Web subscription revenue: The Democrat-Gazette Web site has only managed to sign up about 3,400 subscribers in the past seven years, at about $60 a year (recently increased to $72). Quick math: That's a bit more than $200,000 a year in revenue. Not much.

Rather, Hussman believes that his online subscription model is protecting his newspaper's print business. If people can't get the paper on line for free, he reasons, they'll continue to buy the print edition of the Democrat-Gazette. And indeed, the paper's circulation has held fairly steady at around 180,000 papers a day (275,000 on Sunday) over the past few years, while the rest of the industry's circulation has declined steadily and ever faster.

No wonder Hussman is getting calls from other publishers looking for his secrets. But is he really on to something? Or is Little Rock the exception that proves the rule? Or, more dangerously, has he put a short-term band-aid on the (admittedly lucrative) print business while crippling his paper's long-term online future?

Hussman and I shared a panel last week at a meeting of the Southern Newspaper Publishers Association. It was billed as a debate over paid vs. free online subscription models; needless to say, I was cast as the advocate of free. My position on the subject is a little more nuanced than that–I've always thought there are specific circumstances where news sites can charge for access, either because they can figure out how to create extremely unique and valuable premium products, or because they have a specific area of coverage that allows exclusivity (see Wall Street Journal, The).

But it was interesting to bat the issue around with the cordial and gentlemanly Hussman. He does think he's found a winning model. But I have my doubts. Here are a few reasons why:

Demographics: Little Rock is a fairly conservative market with an older population and a fairly low level of broadband Internet penetration. That may give a built-in edge to print, at least for now.

Competition: Every paper faces more competition from Web sites and non-traditional publishers in its market than it probably realizes, and the Press-Democrat is no exception: craigslist is thriving in Little Rock, and Yelp seems to be getting a foothold. The city has its share of blogs and alternative print publications, too. But it's not exactly a media mecca, and the Democrat-Gazette probably has less to fear, for now, from big national Web sites encroaching on its turf—and audience. Take sports, for instance. Without any major pro sports teams, the city's main sports interest is the University of Arkansas' teams. That probably makes it harder for ESPN.com or other national sports sites to get a significant foothold in the market and provide obvious alternatives to the Democrat-Gazette's gated coverage. That's a situation not matched in other good-sized cities.

Market position: The Democrat-Gazette claims that it has the largest percentage of market penetration of any major American daily (I've heard the same claim from at least two other papers, so let's just say its market penetration is excellent). That would indicate the Little Rock residents are particularly devoted to their newspaper and thus will be slower to switch to alternatives.

But there's an even bigger reason why the Democrat-Gazette's model may not be the ideal for all of those who are clamoring for paid news Web sites: Hussman's core motivation of protecting the print product. Too many paid-news advocates (especially from the editorial side) push for the subscription model, I think, because they see subscriptions as a potentially lucrative new source of revenue at a time when print ad revenue is nose-diving and Web ad sales are stagnant, at best. Just turn that subscription spigot on, they think, and the money will come flowing in. Huzzah!

It's not that easy, as Hussman's 3,400 online subscribers and $200,000 in annual Web subscription revenue demonstrate. Indeed, as I've written before, it's quite likely that the sharp decline in traffic that would be caused by a newspaper site's switch to a paid-subscription model would cripple Web advertising revenue by a dollar amount far greater than the pennies coming in from subscriptions. Checkmate.

But Hussman's game is different: He's choking access to his Web site simply to force readers to keep buying the Little Rock paper. When the Democrat-Gazette Web site was free (through 2002), he got sick of people thanking him for making it possible for them to not buy the paper, so he decided to tilt the balance back in favor of print by charging for Web access. His justification was, and still is, that the ad revenue from print runs an order of magnitude or so higher than what he can get selling Web ads. Why kill the golden goose?

If nothing else, that's a better motivation for publishers to charge for Web content—to protect print revenue—than the usual hope that Web fees will bring in new revenue. Point to Hussman.

But I worry that the Democrat-Gazette publisher is being fatally short-sighted. Hs strategy may be propping up circulation, but print advertising revenue is declining precipitously, even in Little Rock—even with its against-the-grain strategy, the paper has had to do two rounds of layoffs since the first of the year.

There are optimistic publishers, including Hussman, who believe print ad revenue will bounce back significantly when the recession finally abates, but that may be another year or two, and most clear-eyed observers don't believe the rebound will be anywhere near pre-meltdown levels. Just hours before our debate, as Hussman himself pointed out, Chrysler announced the closing of 800 dealers—another direct and permanent hit on newspaper advertising fortunes.

Given the ongoing decline in print revenue, Hussman's heavy bet on print may turn out to be a mistake. At a time when he should be doing all he can to explore alternative revenue streams by maximizing Web advertising revenue, he's limiting his Web site's traffic with his print-first subscription strategy.

That could create real problems in the long term, when the newspaper business inevitably—even in Little Rock—figures out that it has to look to the Web as its largest revenue source. But the Democrat-Gazette will be playing from behind, because it's deliberately limited its Web traffic. (For the record, Hussman says he satisfied with his site's traffic and claims it's the largest of any media site in Little Rock. But it's obviously far lower than it could be.)

On some level, I think Hussman's experiment is a valuable one, and it would be nice to see other, reasoned attempts at subscription news products just to see what does or doesn't work. (Again, particulars of Little Rock's circumstances may skew the apparent results there.) Hussman certainly seems to have thought out his reasons for charging for online content a lot more carefully than other paid-content advocates, like MediaNews Group's William Dean Singleton, who said last week his papers will start charging for content, allegedly because they provide such excellent, irreplaceable coverage of their local markets. Given MediaNews' stripped-to-the-bone newsrooms and its apparent obliviousness to new forms of competition in places like Denver and the Bay Area, good luck with that. MediaNews is not going to duplicate any measure of Huffman's success.

In the long run, I believe Hussman is making a mistake by charging for access to the Democrat-Gazette's Web site, in spite of the strategy's short-term success. He's ultimately a printie who's become myopic about the future of the news business, fervently defending a product and business model that is doomed to extinction. By betting everything on the past, he's mortgaging his paper's online future.

A couple of footnotes: At the end of our SNPA debate, moderator Tom Silvestri, president and publisher of the Richmond Times-Dispatch, asked the 40 or so publishers and editors in the room if Hussman and I had changed any minds on the topic. Not a hand went up. But it was clear from conversations that there's a lot of thinking going on about paid Web subscriptions, that more than one executive in the room admittedly had had multiple changes of mind on the subject over time—and that everybody was really weary of it. One exec said he wished his company would just make a decision either way, so that they could stop talking about it. Free vs. paid has become a distraction in an industry that can ill-afford any distractions these days.

And then there's this: While Hussman charges for Web access to the Democrat-Gazette, the Web site of another paper he owns, the Chattanooga Times Free Press, remains—as its name ironically suggests—free. Why? He said it's because he's allowed the paper's local management to take its own course on the issue, based on local market needs. Hussman may be a true believer about paid Web subscriptions—but apparently even he knows there's no one correct strategy.

Punishing Google is not a magic bullet—indeed, it's a short-sighted strategy that can devastate traffic and ad revenue.

Repeat: There is no magic bullet. In fact, most of the bullets just listed are of the dumb-dumb variety (as opposed to dum-dum, nitpickers). They reflect the thinking of executives and journalists who don't really understand the business of journalism, the reality of the new Internet-driven world, or what consumers are looking for these days. Mostly, they're defensive maneuvers, tired attempts to salvage a print-centric business model that is close to long gone.

Instead, news companies need to be working hard to innovate, to reach audiences in new ways, to create new forms of newsgathering and presentation and to pursue truly new revenue streams. That's a tough prescription in a time of across-the-board cutbacks, and no, there's no guarantee of success for many of the freshest ideas. But at a time when Rupert Murdoch reportedly is spending money for a crash project to find ways charge for content, or the New York Times, Washington Post and other publishers are fiddling with Kindle and other magic tablets while their industry burns, maybe they and others should be looking at other ways to, well, survive.

Here are some suggestions for things the industry in which the industry should be investing serious money and resources—and longtime readers know there's nothing really new here. But until we see some real attempts to break from hoary old business models and stale ideas, these still are wildly innovative by the standards of stodgy, unimaginative mainstream media thinking:

Aggregation/curation: I'm still waiting for the first big newspaper site to take a seriouscrack at aggregating all the local news and information it can find, regardless of source, and establishing itself as the expert on all things local. (Hint: Watch the Chicago Tribune to break the mold here in the next few weeks.) It's a logical extension of the local brand, and it's a lot cheaper than putting more reporters on the street.

Vertical products: One of the most broken things about the newspaper business is the "all things to all people" model. By trying to do a little of everything, newspapers don't really do anything well—for readers or for advertisers. New products that focus on specific, vertical audiences should be the wave of the future, but so far they're barely even a trickle (let's see—there's Gannett's MomsLikeMe franchise, and then...not much else).

Hyperlocal: Just about everything else you can think of—national news, international news, movie reviews, even sports—is done as well or better on the Web. Which leaves local as the last truly defensible newspaper franchise (at least until some startup figures it out). Newspapers should be reorganizing their staffs around local news and information, aggregating where possible and reaching out to blogs and user-generated content to fill the holes. That can result in a package of unique content that readers can't get anywhere else.

SEO: Instead of thinking of Google as the enemy, find ways to use it better. Search-engine optimization is standard procedure for successful Web sites, but all but unheard-of among newspaper sites. (Want proof? Search for a big local issue, name or icon, and see if the local newspaper site appears anywhere near the top of the results.) Newspaper sites should be doing everything they can to draw in readers who are searching for information that's all but hidden on their sites.

New forms of advertising: Banner ads are so...1997. Interstitials, pop-ups and intrusive ads are so...obnoxious. Classifieds are so...dead. Meanwhile, Google is making money off of local search, other non-newspaper companies are pioneering things like click-per-call and pay-per-click, and various startups are perfecting cheap ways to create and sell local ads. Could it be that newspapers are having trouble making online advertising revenue grow because they're selling the wrong kinds of online ads? Hmmm.

Expanding the advertiser base: Newspapers—including their Web sites—tend to focus on traditional advertising categories like banks, real estate, autos and retail. Quick, name four businesses you don't want anything to do with in this economy. Meanwhile, smaller, non-traditional local advertisers (plumbers, nail salons, cafes, you name it) are trying to figure out how to advertise online. Newspapers need to connect with them, pronto.

Mobile distribution: Everybody's got a cellphone these days. But most newspaper sites don't reach them. Traffic alerts, headlines, latest scores, etc., are valuable pieces of information that readers want, and that newspapers can deliver via SMS, text or iPhone apps (with advertising and/or sponsorships, no less). But few papers do this well or consistently. In the same category: headlines and alerts via Twitter and RSS. Take these very seriously—don't pay them lip service or outsource them.

That's a start. Newspapers need to be looking for inspiration on additional groundbreaking initiatives from industry-leading innovators like the Cedar Rapids Gazette and the Bakersfield Californian, who seem unafraid to try new ways to serve readers and advertisers. I wish there were a lot more leaders to list, but there aren't, unfortunately. (You can find some other ideas here and here.)

There are no magic bullets. But there should be a constant, intensive search for new types of weapons. As long as newspapers are playing defense and falling back on predictable solutions, things are only going to get much bleaker.

Another good read: Jack Shafer of Slate, once again, reaches back into history to draw parallels with today. This time, he revisits the Great New York Newspaper Strike of 1962-63.

Journalists and publishers improvised, and readers, parched for news, features, entertainment, and advertising, experimented with finding new sources. Giving up the daily newspaper habit proved easy for many New Yorkers.

Shafer's trip into the early '60s finds that, in a world without newspapers—possibly coming soon to a city near you—it turned out that there were available alternatives, even a generation or two before the Internet. And when the strike was over, circulation was off 10 percent and several of New York papers were on the verge of extinction—over the next couple of years, the city went from seven dailies to the three we know now. Traditional newspapers just may not be as essential to life as journalists and publishers hope.

May 07, 2009

It's hard to keep up with everything worth reading about the state of the journalism business, but here are a couple of good ones I found today.

First, veteran Washington Post reporter Walter Pincus, writing in CJR, surfaces some unpleasant truths about what's wrong with journalism today (he gets fuzzier when he talks about the Web and the future of news, but his basic diagnosis is very good).

May 02, 2009

Well, I think we now know why somepeople who want to save newspapers are so enamored of Amazon's Kindle. Turns out that newspapers and Kindle have an ugly demographic fact in common: Their customers tend to be over 50. Uh-oh.